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TMI Blog1986 (11) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ase dyes from the open market and those base dyes were supplied by the dealers on invoices handed over to the petitioners. The Central Government published Exemption Notification No. 180/61 on November 23, 1961 exempting the dyes specified in the Schedule thereto from the whole of the Excise Duty leviable thereon, if such dyes were manufactured from any other dyes on which, inter alia, the duty of excise had already been paid. The relevant portion of the Exemption Notification is as under : "EXEMPTION NOTIFICATION Exemption to certain dyes, if manufactured out of duty paid dyes. - In exercise of the powers conferred by sub-rule (1) of Rule 8 of the Central Excise Rules, 1944, the Central Government hereby exempts dyes specified in the S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed pointing out that the raw materials were purchased from the open market and the petitioners were justified in presuming that the same were cleared after payment of excise duty. The Department did not take any further action in the matter. Suddenly on October 6, 1983, the petitioners were served with show cause notices by the Superintendent of Central Excise, Division II, Bombay to show cause as to why duty from July 1981 to March 1982 should not be recovered as documents evidencing payment of excise duties on base dyes were not produced and in spite of that exemption under the Notification was secured. The petitioners sent reply, but the Superintendent issued three further identical show cause notices. The petitioners sent a detailed r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n market. Shri Talyarkhan urges that the petitioners are entitled to presume while purchasing base dyes in open market that excise duty as well as countervailing duty on such base dyes has already been paid. Shri Desai, learned Counsel appearing on behalf of the respondents, on the other hand, urged that the findings and the conclusions recorded by the two authorities below are correct and are not required to be interfered in writ jurisdiction. Shri Desai urged that the authorities below have correctly held that the burden of establishing that the terms of the exemption notification are complied with was on the petitioners and that not having been done, the liability to pay duty cannot be avoided. 4. In my judgment, the orders passed by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to know whether excise duty on the manufactured goods sold to the purchasers had already been paid by the manufacturers. If the purchaser has to satisfy the excise authorities that goods which he has purchased from the market suffers duty, it would impose a burden which no purchaser would be able to discharge. In the case of Sulekh Ram and Sons v. Union of India and others reported in 1978 E.L.T. 525, Delhi High Court has held that under excise system no goods can be removed from the place of manufacture without first paying the excise duty. Therefore, a purchaser can presume that the goods are duty paid. It would be incredible if the purchasers were required to ascertain whether excise duty has already been paid by the manufacturer befo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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